불가리아 주요경제뉴스 ( 6 - 12 FEBRUARY 2009 )

BULGARIAN ECONOMIC TOP NEWS DIGEST

WEEKLY REPORT ( 6 - 12 FEBRUARY 2009 )

 

 

 

Sections/headline briefs:

 

 

 

MACROECONOMY:

 

·        Chinese to produce automobiles in Bulgaria

·        Economy and Energy Ministry sets up industrial zones national company

·        Negative balance reported for 2008

·        Bulgaria sees 4% inflation this year

·        Bulgaria's booming laptop market to reach USD 250 M in 2009

·        Bulgaria negotiates € 200 M in aid for the business

·        Reuters: Bulgaria's nuclear restart: justice or poker?

·        Bulgaria Energy Minister alludes to strong interest in new Kozloduy reactors

·        Bulgargaz forecasts cheaper gas

·        Research of the gas link with Greece starts

·        Car dealers registered the weakest January

·        Building up of hydroenergy projects on Danube river envisaged in energy strategy by 2020

 

 

 

INVESTMENTS:

 

·        Bulgaria expects $1 billion US investments

·        New purification system in Blagoevgrad

·        Swiss Alpiq to pump € 80 M into Bulgarian wind farm

·        Spaniards built a new factory in Montana

·        Biomass heat plant halves Bansko's heating costs

·        Festa Hotels invests in four new hotels

·        Private investors interested in 7th and 8th block of Kozloduy NPP

COMPANIES:

 

·        Bulgaria's Enemona to seek strategic investor in multi-million euro energy project

·        "Bulgaria today" business fair opens in Moscow

·        Lufthansa - the biggest foreign transporter in Bulgaria

·        Toy retailers map out expansion plans

·        US drugs company set to buy Bulgaria research organization

·        Cisco fund buys 17% of Investor.bg

·        International real estate consultants King Sturge open office in Sofia

 

 

 

GLOBAL FINANCIAL CRISIS ANALYSIS AND NEWS:

 

·        Financial crisis shatters Bulgaria's wine exports to Russia

·        Simeon Sax-Coburg: New world will emerge from Financial Crisis

·        Economy and Energy Minister: Crises place business at new technological levels

·        Big logistics firms hit by weakening orders

·        More than 50% of realty companies in Bulgaria to go bankrupt

·        Bulgarian stocks drop record low

·        Bulgaria's mining industry braces for 50% output decline over crisis

·        Bulgaria current account deficit starts to fall due to Global Financial Crisis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Articles:

 

 

MACROECONOMY:

 

Chinese to produce automobiles in Bulgaria

A certificate for a Bulgarian-Chinese investment in automobile production for the amount of 100 million levs has been signed. This was announced by the Executive director of the Bulgarian Investment agency Stoyan Stalev, cited by BNR.He commented that the sum of 100 million levs is only initial and can be seen as a fresh start for the Bulgarian automobile construction.

Economy and Energy Ministry sets up industrial zones national company

 

The Economy and Energy Ministry has set up an Industrial Zones National Company with a start-up capital of 100 million leva, the Ministry's press office said.The Ministry has set itself the task to launch the construction of up to 20 zones this year. Each industrial zone will be a separate company with a state interest of at least 51 per cent. Municipalities and individuals can contribute investments, land and other assets making up a stake of 49 per cent or less.A methodology for selection of the proper sites will be elaborated, based on criteria including large land plots owned by the State or the municipality, labour and appropriate infrastructure in the municipalities. There are no restrictions on the form of the potential investors' presence - they may either buy or rent parts of the zones.As a way of curbing the impact of the financial crisis, the 2009 budget plans for the establishment of industrial zones, which are to make it possible to attract highly productive, export-oriented investments and to create a favourable business environment.The company was established in line with the updated government programme and the Economy Ministry's draft document "Export Policy in 2008-2013: Vision 2010", which the government has approved.The company is expected to contribute substantially to the country's stable economic development through investment promotion. In recent years the Bulgarian economy has proved to be the EU leader in foreign direct investment as a percentage of GDP, which has made Bulgaria one of the most attractive investment destinations worldwide, the press office said. The Economy and Energy Ministry has the ambition to keep Bulgaria at the top and to create prerequisites for it to become the EU leader in real economic growth at the time the global financial crisis subsides.

Negative balance reported for 2008

The export of the country amounts to 29.9 million levs, while the import - to 49.5 billion levs. This is preliminary data from the National statistics institute, cited by finance.news.bg.The statistics covers the period from January to December 2008 and is FOB prices.The total trade with products for the country on current prices amounts to 79.4 billion levs.Compared to the previous year the increase of trade is by 14.7%.During the year, trade was most active in June, July and October.In 2008 the export of products (FOB prices) amounts to 29.9 billion levs and increases by 13.3% compared to the previous year.The import of products (CIF prices) amounts to 49.5 billion levs, or 15.7% more than the previous year.In 2008 the tendency of exceeding import over export continues. The value of import products is 66% bigger than the value of export products.

Bulgaria sees 4% inflation this year

This years inflation rate will not gross four percent, as last years was eight, reads an analysis of the Center for Economic Development (CED), as quoted by the Bulgarian News Agency (BTA). CED analysts also say that the economy still has a potential for some growth this year, although it will be far below four percent. CED experts say the economic growth for the last trimester of 2008 will be five percent, and for the whole year - about 6 or 6.5%, although earlier prognoses suggested economic growth of 6.9 or 7%. CED expects the agriculture sector to continue its upward development, whereas the service sector will see a considerable slowdown. The centers analysts estimate that the slowdown in construction sector, as well as the downturn in the sector of industry that began during the last trimester of 2008, will continue in 2009, as well. Consumption and investments will keep on shrinking this year, as well as foreign trade. January?s gas crisis delivered a heavy blow to many Bulgarian companies and practically wasted the momentum that the economy accumulated in 2008.

Bulgaria's booming laptop market to reach USD 250 M in 2009

 

Over 300 000 laptops for over USD 250 M will be sold in Bulgaria in 2009, according to an estimate made by the independent Bulgarian market research agency CBN Pannoff, Stoycheff & Co, quoted by the Pari Daily.The agency's estimates show that Bulgaria's IT sector has clearly one product with guaranteed growing sales - portable computers.According to its analysis, the expected laptop sales for USD 250 M in 2009 would make this type of business comparable to the Bulgarian sales of new cars, or to Bulgaria's revenue from winter tourism.The CBN agency is urging the Bulgarian banks to continue their moderate credit policy towards the large and medium-sized IT companies in the country. According to the agency some 200 large and medium-sized and about 1 000 small IT firms work in the country. Any inadequate bank credit policies could derail Bulgaria's IT sector, which would affect the general competitiveness of the Bulgarian economy, and would therefore hurt the country's GDP.

Bulgaria negotiates € 200 M in aid for the business

Bulgarian authorities are in negotiations over the establishment of a joint venture between the Bulgarian Bank for Development and the European Investment Fund. The joint venture will have a capital of 200 million euro, which will be distributed among representatives of the Bulgarian business through the commercial banks. PM Sergey Stanishev has invited representatives of the Fund to visit Bulgaria by the end of this month. During their visit, the negotiations over the EC?s program Joint European Resources for Micro to Medium Enterprises initiative, known by the acronym JERENIE, are expected to be finalized. The program uses EU financial know-how to support small businesses around Europe. ?The joint venture establishment contract is expected to be signed during the first trimester of the year,? said Dimitar Dimitrov, Chairman of the Managing Board of the Bulgarian Bank for Development. However, the European Investment Fund have not announced their decision, yet.

Reuters: Bulgaria's nuclear restart: justice or poker?

Restarting two Soviet-era reactors at Bulgaria's sole nuclear power plant would be "a triumph of justice" for the engineers who maintain the power units, but observers and some politicians, including Bulgaria’s former King Simeon Saxe-Coburg-Gotha,  say the move by the Socialist-led Cabinet is a bluff and a gamble. They argue it is a ploy to stoke a nationally sensitive subject and revive plunging support ahead of parliamentary elections likely in July or August.Opposition parties and the ex-king Simeon's centre-right NMSP, a junior partner in the coalition, say the real goal is to divert attention from Bulgaria's entrenched problems such as corruption and the job losses that a global slowdown will bring.Opinon polls show over 70 percent of Bulgarians want the government to resign. But on the other hand, over 70 percent of 7.6 million Bulgarians view Kozloduy as a symbol of national pride.The Socialist-led Government says the reactors were unfairly deemed dangerous by the EU and has called on Brussels to compensate Bulgaria for the double blow of the gas row and the global economic slowdown, by allowing a restart. If the government wants to unlock any energy with Kozloduy, it's not nuclear energy but political energy and an attempt to mobilise its electorate," said Ivan Krastev of the Sofia-based Liberal Strategies Institute.Closing the two 440 megawatt units at Kozloduy has also cost Bulgaria 350 million euros in lost revenues in the past two years more than the 270 million euros promised by the EU in compensation, the plant's management says.Worsening power deficits in the western Balkans, which depended on Bulgaria to make up for their own shortages, are another argument put by Sofia to support a restart.Many scientists say the two VVER units could operate safely for another eight to nine years and have been wrongly associated with Chernobyl type reactors. Kozloduy say it has maintained the reactors in good shape since 2007 and can restart them in 30 days. US $ 300 million has been invested in the reactors’ upgrade.

Bulgaria Energy Minister alludes to strong interest in new Kozloduy reactors

The Bulgarian Energy Minister Petar Dimtirov announced Wednesday that there has been a distinct interest on the part of private companies to build Units 7 and 8 of the Bulgarian Nuclear Power Plant (NPP) "Kozloduy" the Darik radio reported.Dimitrov further stated that the closing of Units 3 and 4 of the NPP was a loss not only for Bulgaria, but for the Balkans as well. The Minister said that Bulgaria had not participated in any World War III and should not be forced to pay reparations through the closure of the two Units.The Energy Minister was firm that the Bulgarian Cabinet was not going to set aside funds for the construction of Units 7 and 8 in Kozloduy, but added that some of the world largest companies have shown strong interest in such project.Dimitrov declined to offer any names, and joked that "building nuclear reactors was not known to be a hobby for Bulgarian businesses."Regarding reported conflicts between Bulgaria and the Russian "Atom Story Export" over the construction of NPP "Belene", the Minister said that talks were on the table to resolve the issue."Atom Story Export" demands that everything that is manufactured in Russia is paid by Bulgaria at prices aligned with the inflation there, while the workers needed to be paid according to the inflation rate in Bulgaria. The Bulgarian side is resolute that the inflation must be calculated according to "Eurostat" data. "Eurostat" is the Statistical Office of the European Communities. According to Dimitrov, Russia has also asked to deliver part of the Russian gas volume from the "South Stream" line through Bulgaria's gas system. The Minister was firm in his promise that Bulgaria was not going to allow a merge of the two systems. He also said that the country was now fully dependent on Russian gas, but by 2030, 34% of the gas would come from "Nabucco" and the Turkey-Greece-Italy gas line.Petar Dimitrov is taking part Wednesday in a forum aimed at defining Bulgaria's energy strategy through 2020.

Bulgargaz forecasts cheaper gas

The forecasted price of natural gas for the second quarter of 2009 must be 543, 61 levs without VAT per cubic hectometer, which a decrease by 11.56%. This was announced by "Bulgargaz", as they specified that the lower price is a result of factors, forming the level of the price of natural gas.The decrease of 71,05 levs (cubic hecto meter) is a result primarily of the lower in the last months prices of alternative fuels on international markets, as well as the lower exchange rate of dollar/lev.For the last time natural gas has decreased in price in April 2007 and since then has increased by nearly 90%.The final proposal of "Bulgargaz" for the price of natural gas for the second quarter of 2009 will be announced right after the submission of the proposal in DKEVR (state regulatory commission) on March 11.The possible price decrease of gas has to lead to lower prices of hot water beginning April 2009.  

Research of the gas link with Greece starts

Within 3 months the Bulgarian energy holding and "Bulgargaz" must prepare the start of the pre-investment research for Bulgaria's inclusion in Greece's gas network. This was announced by the municipal administration, cited by BNR.The route, which the gas pipe will follow, is Dimitrovgrad-Haskovo-Kurdzhali-Momchilgrad-Komotini. The research aims the finding of the main technical parameters. They must be ready by the end of October.Parallel to that, plans will be prepared for the individual land plots, as well as the reports on the impact on the environment.The total length of the planned gas pipe is about 150 kilometers, 125 of them are on Bulgarian territory, the rest 25 - in Greece.The project plans that the route follows in its major part the new route to the pass "Makaza". It is still not clear what the investment will be, but the forecasts are for about 100-120 million Euro.In order for the gas pipe to be profitable, individual consumers will not be enough. Kurdzhali municipality is one of the regions that do not use "blue fuel".

 

Car dealers registered the weakest January

 

Bulgaria’s new car dealers registered the weakest January on record as data released by the industry association yesterday revealed an almost 46% year-on-year slump in sales. The global financial crisis put many car purchase plans on the backburner and made banks and leasing firms pickier. Traditionally the slackest month of the year, January saw the number of sold vehicles drop to 2,300 from 4,309 a year before. Light vehicles deals numbered 2,204, while lorries were 91. Dealers sold only five buses and six motorcycles. The market plummeted 76% in the twelve months to December 2008, but closed the year 4.6% higher. Last year’s number third by sales, Porsche BG with Volkswagen, moved on top of the market in January, with 287 deals, or 13.02% of the market. Former number one Opel, which has eight local distributors, slipped to share fifth/six place with Peugeot and Sofia France Auto. Citroen dealer Automotor Corporation leapfrogged from seventh to second position, on the back of a supply deal with the Interior Ministry for 154 vehicles. In lorries, Balkan Star with Mercedez sealed another victory with 53 units. The runner-up, Iveco, struck 27 sales deales. Bombardier ATV dealer Zundert Extreme registered four of the six motorcycle contracts in January.

Building up of hydroenergy projects on Danube river envisaged in energy strategy by 2020

 

Bulgaria's Energy Strategy for the period until 2020 envisages implementation of hydroenergy projects on the Danube as well as completion of the Upper Arda and Toundja projects, Economy and Energy Minister Peter Dimitrov said Wednesday in a discussion of the document. The national target for the relative share of renewable energy sources of 16 per cent in 2020 is lower than the European one. The carbon dioxide emissions should be reduced by 20 per cent and energy efficiency should increase by 20 per cent by 2020 under the strategy.Currently, the share of renewable energy sources is about 9.4 per cent. In 2014 and 2015 the go-ahead of reactors of the Belene N-plant is expected to be given and the Maritsa Iztok 4 thermo-electric power plant, equipped with a modern facility for capturing greenhouse gas emissions is expected to become operational. Plants, operating on gas, are expected to be unveiled in 2018, 2019 and 2020. These facilities will have a future given that the Nabucco and South Stream gas pipeline projects are implemented, the Minister observed. In 2007, 59 per cent of the electricity was produced by thermo-electric power plants, operating on coal, 33 per cent by nuclear power facilities and about 8 per cent by renewable sources. In 2020 the share of electricity, produced by renewable sources is expected to increase up to 11 per cent and the one by nuclear power facilities up to 37 per cent, while the share of electricity, produced by thermo-electric power plants, will drop from 59 per cent down to 52 per cent.All Danubian countries have shown interest in the Nikopol-Turnu Magurele and Silistra-Calarasi (on the Danube) hydroenergy projects as this would boost navigation along the river.The Upper Aacrda and Toundja projects are also important for Bulgaria, said Dimitrov adding, however, that they are currently halted due to a judicial dispute between the Turkish investor and the Bulgarian side. The Turkish company Ceilan is planning to sell its share in Upper Arda and then the two projects would be dusted off, he added.The Energy Strategy attaches high priority to the diversification of natural gas supplies. After 2010 Bulgaria will rely on the Turkey-Greece-Italy gas pipeline and Nabucco and a considerable share of its needs of natural gas would be satisfied by alternative sources, Dimitrov observed.There is private investor interest in building units 7 and 8 of the Kozloduy Nuclear Power Plant, Dimitrov also said.In 2007 Bulgaria exported and transited 4,500 million kWh and 2,800 million kWh of electricity, respectively, Dimitrov said. The network capacity is for about 9,000 million kWh, he specified."If units 7 and 8 are built, we hope to transit at least 18,000 million kWh in 2030; the export capacity may increase up to 33,000 million kWh," the Minister further observed. By then the capacity of the electricity transiting network is expected to equal some 15,000 million kWh, so efforts should be made for its extension.There is considerable shortage of electricity in Turkey, Croatia and Macedonia, Dimitrov also said.The Economy and Energy Minister also said that the state would not allocate funds for this project and it should fully rely on private capital. Some of the biggest companies in nuclear power engineering were allegedly showing interest in the project.The South Stream project involves construction of a gas pipeline, which is totally different from the Bulgarian gas transiting system, Dimitrov also said. Parallel transiting networks should be built up rather than using the existing Bulgarian gas transiting system.Dimitrov told journalists that there are proposals to include the existing transiting facilities in South Stream, adding, however, that this could not be done. Gas could be transited via the Bulgarian system only if transiting fees are paid as has been the case so far."We expected that the route and quantity of transited gas within South Stream would be specified during the visit [of President Purvanov] to Russia but this did not happen," Dimitrov went on to say. The Bulgarian side would not allow destruction of the Bulgarian gas transiting system through increasing the capacity of South Stream.Commenting on the district heating section of the Strategy, Petko Milevski, Executive Director of Sofia's heating company, said the accents should be reordered. He questioned the sggestion that co-generation alone would solve the district heating companies' problems. Milevski argued that while natural gas would remain a major source of heat energy, waste had a great potential too. Sofia generates between 470,000 and 680,000 tonnes of waste a year, he said. He cited Vienna as an example of using waste to generate 17 per cent of the heat load.A German company commissioned by Sofia's authorities found that waste separation and processing could yield some 400,000 tonnes of incineratable products, equivalent to 140,000 t of black oil. Milevski added that Sofia's waste would be enough to keep the district heating companies operating in December and January when energy consumption amounts to about 30 per cent of the annual heat load.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INVESTMENTS:

 

Bulgaria expects $1 billion US investments

"Bulgaria expects investments of US$1 billion in two projects of US companies this year. This is quite important in times of world financial crisis," Bulgaria's Minister of Economy and Energy, Peter Dimitrov, stated. Minister Dimitrov will have a meeting with a team of the General Electric that are ready to invest 800 million euro in a wind farm in Bulgaria. Energy company AES is willing to invest 240 million euro."Bulgarian media do not want to believe me, but according to a report of the United Nations Committee on Trade and Development (UNCTAD), Bulgaria occupies second place in the world in terms of favorable investment climate after Hong Kong," Minister Dimitrov added.
Minister Dimitrov also said he expected a deal for cigarette producer Bulgartabac by the summer.

New purification system in Blagoevgrad

Purification system worth BGN 11.322 million will be opened in the town of Blagoevgrad today by the mayor Kostadin Paskalev and ministry in ecology Chakarov. 70% of the finances were provided under ISPA programme and the rest 30% were from the state budget. Another BGN 17.335 million under Environment Operative Programme were allocated for water infrastructure development and reconstruction of sewerage system in four residential districts.

Swiss Alpiq to pump € 80 M into Bulgarian wind farm

 

Vetrocom, the Bulgarian unit of Swiss energy group Alpiq Holding, will invest nearly EUR 80 million (USD 103.5m) over the next two years to build a 50-MW wind farm in Kazanlak, central Bulgaria. The project has earned the company a top-investor certificate which allows for fast-track administration and other state support. The park will comprise 20 wind turbines of German Fuhrlander, each with a nameplate capacity of 2.5 MW. Construction works will start in the spring of 2009 and finish by the end of 2010, the local investment promotion authority told news outfit profit.bg. The project will create some 100 temporary jobs. It is part of Alpiq’s strategy to boost the share of renewable energy sources. The energy group was set up in early 2009 following the merger of power generation firm Atel Holding and local peer EOS. The group, which operates a 2,671 km high-voltage grid in Switzerland, has a combined power generation capacity of 5,270 MW and annual output of 20 TWh. Almost 60% of its output is CO2-free through its nuclear and renewable power units, which account for 31.7% and 27.5%, respectively, of total power generation.

 

 

 

Spaniards built a new factory in Montana

A Spanish company constructed a new factory “Montana hydraulic” in Montana, announced its executive director Silvia Vladova.2 million euro were invested in the construction of the factory, 150 workplaces have been opened.Turners, locksmiths, welders and others will work in the plant after undergoing a preliminary educational course.The factory will produce cylinders for wind and water power plants as well as water-supply parts with the most modern technologies and machines.“Montana hydraulic” will offer its production mainly on the European market where the investors have positions.New markets on the other continents also will be sought, explained Silvia Vladova.

Biomass heat plant halves Bansko's heating costs

 

Since late 2006, the mountain town of Bansko has been able to halve its costs for heating of public buildings and remains untouched by problems such as the recent disruption of gas supply to Bulgaria, Bansko Mayor Ivan Kravarov told the press on Tuesday. The reason is simple: the town has Bulgaria's only heat plant running on biomass.The heat plant provides heating to 45 buildings including all public edifices: the town schools, the kindergartens, the town hall, the church, several hotels and several private buildings, said Ivan Hinovski who headed the biomas plant project. The project absorbed an investment of 11 million leva, including 7 million leva in an EBRD loan and 4 million own funding. The energy costs 96.44 leva/MWh which is even cheaper than natural gas.The plant uses waste from the timber processing shops in the area. It employs 15 staff.This coming summer the local museum and a high school will get connected to the biomass plant.

Festa Hotels invests in four new hotels

 

Luxury hotel chain Festa Hotels presented its 2009 business plans, as well as its management at a meeting with leading Bulgarian tour operators and agencies. The initiative is part of the chain's annual promotion campaign. The company aims mainly at attracting the Bulgarian tourists and establishing hotel complexes appropriate for complete relaxation. Through its investments in Pomorie and Borovets Festa Hotels will not just create new jobs but it will also provide new opportunities for further development of these destinations and their popularization among the Bulgarians in parallel with securing complete relaxation in a luxury atmosphere. This year four new hotels of the Festa Hotels label will open. Festa Holding, which is 86.104% held by business lady Petya Slavova, will own the hotels. Thus, the number of Festa Hotels will grow to six, three of which at the seashore, two in Borovets and one in the capital Sofia. Festa Hotels is the only Bulgarian hotel chain which operates sea, mountain and city hotels at once. This gives the company the opportunity to serve also corporate clients. Each of the hotels has its own style and unique features being united by the skillfully worked interior and exterior details that are in harmony with the nature and the surrounding environment. All these features have turned the hotels into heavenly places. Moreover, the chain's management aims at standardizing the tourist services and completely changing the concept for a holiday or business event in Bulgaria.

 

Private investors interested in 7th and 8th block of Kozloduy NPP

There is private investor interest for the construction of 7^th and 8^th block of atomic plant "Kozloduy". This was announced by Economy Minister Petar Dimitrov, cited by BNR, during the discussion of Bulgaria's energy strategy up to 2020.He added that the state will not invest financial resources in this project. According to him, if it is realized, it will be sponsored entirely by private capital.Minister Dimitrov pointed out that one of the biggest firms in atomic power engineering is interested in "Kozloduy".He specified that in 2007 Bulgaria exported 4.5 billion kilowatt hours electric energy and transported 2.8 billion kilowatt hours.The capacity of the network is about 9 billion kilowatt hours, Dimitrov added.In 2030 we hope to transport at least 18 billion kilowatt hours, and if 7^th and 8^th block are constructed, the capacity for export might increase to 33 illion kilowatt hours, the Minister pointed out.He specified that the capacity of the electric distribution network is expected in this period to be about 15 billion kilowatt hours, so it must be worked towards it expansion.Dimitrov added that there is great insufficiency of electric energy in Turkey, Croatia and Macedonia.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMPANIES:

 

 

Bulgaria's Enemona to seek strategic investor in multi-million euro energy project

 

Bulgarian engineering, construction and energy group Enemona said on Tuesday it wants to attract a strategic investor in a local energy project estimated to cost some 1.5 billion levs ($995 million/767 million euro). The company has decided to hire a consultant which would advise it in picking a strategic investor in the Lomski Ligniti project, Enemona said in a statement without elaborating. Lomski Ligniti, Enemona's largest project, is an energy complex comprising lignite mines and a coal-fired power plant with installed capacity of 400 to 600 megawatts which it plans to put into operation by 2012. The energy complex will be located in the town of Lom, on the Danube river.

"Bulgaria today" business fair opens in Moscow

The "Bulgaria Today - Realty, Tourism, Wine" business fair official opening was held Friday in the Russian capital Moscow, announced the press office of the Bulgarian company "Glavbolgarstroy".The business fair will continue from February 5 to February 7, 2009, in Central Exhibition Hall "Manej" in Moscow as a part of the official opening of "The Year of Bulgaria" in Russia.After the opening press conference, whose topic was the development of Bulgarian economy, Bulgaria's President Georgi Parvanov and Moscow's Mayor Yury Luzhkov visited the stand of the Bulgarian construction company Glavbolgarstroy, where they met with its CEO Simeon Peshov.Some other distinguished guests of the the fair were the Minister of Foreign Affairs of Bulgaria Ivaylo Kalfin and the Deputy PM of the Russian Federation Sergei Sobyanin.During the exhibition Glavbolgarstroy will show three of its real estate projects - "Saint Toma", "Borovets Gardens" and "Belchin Park". The resort "Saint Toma" was awarded "Resort of the Year" and "Building of the Year" prizes in the Building of the Year 2008 competition, and also won "Number one Resort on the Balkans" award.Glavbolgarstroy is the biggest construction company in Bulgaria with more than 40 years of experience in and outside Bulgaria, specialized in civil and industrial engineering.

Lufthansa - the biggest foreign transporter in Bulgaria

Over 400 000 passengers from/to Bulgaria and more than 70 million passengers globally were reported by Lufthansa and SWISS in 2008. The company expects operative profit of about 1.3 billion Euro for the past year, Money.bg announced.Today, Lufthansa announced that the company has reached record numbers on the Bulgarian market in 2008. Together with its partner SWISS, Lufthansa has transported more than 400, 000 passengers, which is a 20% increase compared to 2007, the company announced."This data once again shows our success and our leading positions on the Bulgarian market. With 48 flights per week (7 day flights of Lufthansa and 1 of SWISS) to our centrals in Frankfurt, Munich, Dьsseldorf and Zurich, Lufthansa Group is the biggest foreign transporter, which performs work activity in the country", Gabor Horvat, General manager of Lufthansa and SWISS for Bulgaria and Albania, says.

Toy retailers map out expansion plans

Greek kids toy and products chain Jumbo will speed up growth on the Bulgarian market in the coming years as local company Hippoland is getting ready to break ground on a new Sofia outlet. Jumbo plans to open eight to 12 stores in Bulgaria in the coming years, the company said on its website. Its sole Bulgarian outlet at the moment is located on the capital’s Bulgaria boulevard, but six more plots have already been purchased in Sofia, Plovdiv and Rousse. Sizes range from 7,000 to 33,000 square metres in the capital, over 42,000 sq m in Plovdiv and 31,000 sq m in Rousse. The first two new outlets are scheduled to open doors in 2010. Jumbo’s domestic rival, Hippoland, is about to open its third Sofia store in Mladost neighbourhood. It will occupy a 600 sq m area in an outlet of hypermarket chain HIT. The store will be Hippoland’s eight in the country, with others located in Sofia, Plovdiv, Veliko Tarnovo, Bourgas, Varna and Stara Zagora. Experts say the Bulgarian children toys and accessories market has been heating up in the recent years but there is room for more players. The other companies there are local chains Comsed and Piggy’s House.

US drugs company set to buy Bulgaria research organization

 

US pharmaceutical company PPD is set to buy AbCRO, a Bulgaria-based contract research organization, as it hopes to expand its contract drug testing business in Central and Eastern Europe, newsobserver.com reported late Monday.US based PPD, which helps drugmakers test new medicines, employs about 10,500 worldwide, including about 1,700 in Morrisville, US.The acquisition, which is expected to be completed by the end of March, will gain PPD entry into Romania, Bulgaria, Serbia and Croatia and bolsters PPD's existing operations in Poland, Russia and the Ukraine.Founded in 2000, AbCRO provides Phase II through IV testing, including clinical trial management and monitoring, patient recruitment, site identification and regulatory affairs. The company employs more than 230 people, many of whom have worked with PPD in the past three years.Financial details of the deal have not yet been disclosed.

Cisco fund buys 17% of Investor.bg

 

3TS Cisco Growth Fund bought 16.77% of Investor.bg at the end of last week, the fund reported. The deal was finalised on February 5, 2009 at BGN 12.40 per share to the total sum of BGN 2.40 million. The fund is managed by 3TS Capital Partners and the aim of the buyer is to offer new possibilities for the development of the media group. Yesterday, stocks of Investor.bg rose by 2.70% on the stock market.

International real estate consultants King Sturge open office in Sofia

 

King Sturge, an international property consultancy company providing services in the field of realty, announced Monday the official opening of its office in Bulgaria's capital Sofia.The company's Bulgarian office will put its efforts in assisting a large number of project, including marketing activities for commercial and industrial projects of Bulgarian companies, such as Bulgarian Retail Developments ZBS and Bulgarian Property Developments Plc. In addition, it will provide consulting services for clients such as Plaza Centers, a developer of western style shopping and entertainment centres in Central and Eastern Europe."We are looking forward to building and developing our Bulgarian team, and our projects ", said Andrew Peirson, CEO of King Sturge's Bulgarian office.The company will deal with all aspects of realty and will offer mediation, evaluation, investment, and management of real estate.King Sturg`s Bulgarian office will cooperate closely with the existing offices of the company in Romania, Croatia, Hungary and Serbia.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GLOBAL FINANCIAL CRISIS ANALYSIS AND NEWS:

 

Financial crisis shatters Bulgaria's wine exports to Russia

 

Bulgaria's wine exports to Russia dropped by 45% in 2008 compared to 2007, according to preliminary data of the National Vine and Wine Chamber.The data was announced by its Chair, Plamen Mollov, in an interview for the Darik Radio on Monday.Mollov pointed out that the only reason for the decline of the Bulgarian wine exports to their largest market was the failure of Russian distributors to operate with bank credits because of the effects of the global financial crisis.The prognoses of the National Vine and Wine Chamber do not envisage a recovery of the Russian market for Bulgarian wines in the coming months.According to Mollov, the crisis in the Russian market, where two-thirds of Bulgaria's wine exports usually go, will cause a restructuring of the Bulgarian wine industry.In his words, the largest wine producers will be hit hardest whereas the small local wineries created with EU funds will be able to compensate their losses with an aggressive marketing strategy and additional business activities such as wine-tasting tourism. Mollov predicted some Bulgarian wine producers might merge or might be bought out by large financial companies as some wine factories were already offered for sale in informal talks.

Simeon Sax-Coburg: New world will emerge from Financial Crisis

 

Bulgaria's former Tsar and Prime Minister and leader of the National Movement for Stability and Progress (NMSP) Party, Simeon Sax-Coburg, told the Spanish publication "El Economista" that a new world with new markets will emerge from the global financial crisis.The material is published under the title: "Misconstrued Capitalism Brought the Crisis Upon Us." "Napoleon has said - to rule is to plan for the future. To plan for the future now means to be able to look beyond the crisis," Simeon is quoted as saying.The NMSP leader points out that capitalism itself should not be seen as something negative, just the misconstrued capitalism."It is not the system that is under scrutiny. And, by the way, there is no other alternative - Communism and Collectivism failed. Communism was a failure, an economic and ideological one," Simeon says.The former PM further states that interconnecting economic factors all over the world were the main difference between the current crisis and the one from 1929, adding that for this reason all countries needed to be actively involved in seeking solutions.When asked if his experience in the private sector helped him in his political functions, Simeon replies that a good rule is the rule implemented by someone rational, objective, pragmatic and calm.

Economy and Energy Minister: Crises place business at new technological levels

Economy and Energy Minister Peter Dimitrov opened a conference entitled: "The World Financial and Economic Crisis and the Stability of the Bulgarian Economy," organized by the Institute of Economics and International Relations and the Friedrich Ebert Foundation.Crises place business at new technological levels, and this is the time for the Bulgarian economy to invigorate its scientific activity, Dimitrov said.He said Bulgaria's position is to preserve the currency board arrangement in the country until its accession to the Eurozone. Dimitrov noted that Bulgaria's only "sin" due to which the country does not meet the Maastricht criteria is inflation, but he expressed hope that inflation will decrease due to the crisis.It is now very difficult to find a country in the Eurozone which does not violate the criteria for entry into that zone. It turns out that those who are inside the zone can violate the criteria, and those outside the zone should stand in front of the door and wait, which is not a good position, Dimitrov said. He noted that Bulgaria expects solidarity from Europe.According to the Minister, the anticyclical policy of the central bank should continue. He recalled that the minimum compulsory reserves of commercial banks were reduced from 12 to 10 per cent. Dimitrov said the possibility to guarantee interbank deposits is being examined, because this will give additional security to the banking system.The government is increasing investment expenses in order to respond to the shrinking of the market and the reduction of private demand, the Minister said. He added that, if necessary, the budget surplus will be reduced by 1 per cent.The government took measures to provide a credit resource of 500 million leva for small and medium-sized enterprises through the Bulgarian Development Bank. The insurance capacity of the Insurance Agency was increased, so that it reached the maximum of 1,000 million leva, Dimitrov added."We have reached all necessary agreements with the European Investment Fund for the transfer of 200 million euro under the Competitiveness Programme to Bulgarian commercial banks, and we are waiting for the Fund to sign the documents so that this money will be directed to commercial banks through the Bulgarian Development Bank," Dimitrov said. He said that negotiations are under way with the European Commission to extend 209 million euro for energy efficiency measures. The money will be managed by the European Bank for Reconstruction and Development under the scheme of the International Kozloduy Fund.A total of 45 million euro for 2010 has been transferred ahead of schedule under the Competitiveness Programme for 2009, the Minister said.He said that in the next few days he will meet with representatives of the General Electric company of the US, which intends to invest some 800 million euro in Bulgaria.The Government has decided to allocate 100 million leva for the building of some 20 industrial parks in Bulgaria, Dimitrov said. The natural gas storage facility at Galata may go into operation as early as in the summer, because there is serious investor interest from the Melrose Resources company, he said.

Big logistics firms hit by weakening orders

The major logistics companies operating on the Bulgarian market – DHL, TNT and UPS, all registered a fall in orders in the final quarter of 2008, the companies told Dnevnik.None of the three, however, has posted 2008 financial reports yet.The express delivery industry reflects the state of the economy, according to UPS. Although the global economy is deteriorating, all three companies predict they will maintain last year’s revenue on the back of strong nine-month results.The crisis has hurt logistics companies indirectly by forcing their customers to go on standby. The automobile, textile and electronic industries are some of the most severely hit, according to TNT Bulgaria manager, Ivan Vasilev. Imports are under bigger pressure due to the crisis’ earlier hit on main partners in Europe and the USA, he added. The crisis is having a serious toll on other sectors of the economy as well, according to DHL Bulgaria commercial director, Snezhina Kazakova. UPS said the metallurgical sector is faced with some of the most daunting challenges. The recent gas crisis sparked by a pricing row between Russia and Ukraine and the close of the Bulgarian-Greek borders by protesting farmers have also indirectly affected delivery companies. Under the weight of mounting losses, partners are cutting transport costs or missing deadlines, Kazakova explained. The three companies said they would launch new services, slash prices and improve quality to curb the effect of the crisis.

More than 50% of realty companies in Bulgaria to go bankrupt

 

Around 3 000 of a total of 5 000 existing Bulgarian realty agencies are to go bankrupt due to the effect of the Global financial crisis on Bulgaria's economy.That was predicted by onik Latifian, CEO of the Bulgaria and Macedonia division of the international real estate company Century 21, as quoted by Pari Daily.Latifian also predicted that around 7 000 realty brokers will loose their jobs.The reason for the pessimistic expectation is the decline of the Bulgarian realty market by 12.5%. Mainly small companies are to shut down, Latifian says.The average price of square meter of living area in Bulgaria is EUR 580.

 

Bulgarian stocks drop record low

All indices on the Bulgarian Stock Exchange closed weaker on Monday, sinking to their lowest in the past six years. SOFIX of the 20 blue chip companies was off 2.56% to 265.55 points and Dnevnik 20, of the biggest and most liquid stocks, fell 1.93% to 38.15 points. The local equity market offers quite a few bargains at the moment, but interest is only modest, commented Krasimir Kotev, former finance minister and current manager of two mutual funds at financial intermediary Avrora Capital. Trade volume was heftier than last months’ average, reaching BGN 6.87 million. Most of it came from a single company, Varna-based Black Sea Properties fund, which sold over 141,000 stocks for a total of BGN 5.36 million. The fund said recently it planned an eightfold capital hike to BGN 4.68 million by issuing 4,682,692 shares for BGN 5.2 each. only six Dnevnik 20 components ended higher, two remained unchanged and the rest headed south. Among the most embittered stocks were paint and varnish maker Orgachim, Synergon Holding, car battery maker Monbat and tourist firm Albena, which all slid between 5% and 8%. If Bulgaria manages to preserve its macroeconomic stability, stocks will bounce back 100% in the second half of the year, Katev predicted.

Bulgaria's mining industry braces for 50% output decline over crisis

 

The Chair of the Bulgarian Chamber of Mining and Geology (BCMG), Lachezar Tsotsorkov, said Wednesday Bulgaria's mining sector was expecting a 30%-50% decline in its output because of the effects of the global financial crisis, as quoted by the Pari Daily. According to Tsotsorkov, the actual downturn in the Bulgarian mining industry will become move evident in the second quarter of 2009. The decline will likely lead to the dismissal of mining workers and workers from related industries.The BCMG Chair pointed out that about 30 000 persons were employed in the Bulgarian mining sector, whose production is worth about BGN 2,5 B, or about 5% of the country's GDP. He stressed that one job in the mining sector leads to the creation of three or four jobs in other sectors of the economy. BCMG data shows that Bulgaria's mining company saw their revenue from ore extraction cut in half last year because the international market prices of metals declined by 50%-80%. At the same time, the salaries in the mining sector have doubled in the recent years, and the prices of electricity and related materials have grown tremendously. The Chamber has put forth several anti-crisis measures for the sector including a two-year exemption for all mining companies from paying the state the respective part of the concession fees, and from paying the bank guarantees for their concession contracts.

Bulgaria current account deficit starts to fall due to Global Financial Crisis

 

According to data supplied by the National Statistical Institute, Bulgaria's current account deficit has risen sharply to BGN 17.275 B in 2008, a huge year on year rise of BGN 3 B. The gap is expected to grow to 26 per cent of the country's gross domestic product (GDP) from 25.25 per cent in 2007.As a result of the global financial crisis, December's gap narrowed from November for a second month in a row. In addition, imports shrank faster than exports also for two consecutive months.Bulgaria's economy boomed in the first 10 months of 2008 before the slowdown, leading to the overall rise in the deficit figures.The Finance Ministry said that this was one of the only silver linings of the crisis - slowing economic activity is expected to narrow the trade deficit further.Another factor for December's shrinking deficit was falling oil and metal prices, a trend which is affecting value-added tax (VAT) proceeds.